Former JP Morgan Executive Says That Banks Know That There’s Nothing They Can Do To Against Cryptocurrencies
Salvador Casquero, a BBVA and a former JP Morgan executive, believes that banks and other financial firms are the firms that are most affected by the rise of crypto world and blockchain technology. He says that banks have already lost their battle in trying to fight cryptocurrencies and other related start-ups.
Banks have played an essential role in making the current financial system, including JP Morgan and BBVA firms. They have enabled firms and individuals to access financial services, secure transactions and give and receive payment.
Despite all these roles banks have played, over the last few years, notable growth is evident in new start-ups fintech sector and virtual currencies. This has now resulted in definite changes in the way people have known the financial world.
Virtual currencies like Bitcoin rely on the secure and unhackable technology to secure its value while common money depends on the authority to ensure its credibility and central banks managing its price. This could be one of the primary reasons why many people are embarking on the use of cryptocurrencies leaving the bank services without customers.
Casquero commented on this issue and said that he has witnessed how fintechs, unpredicted technology competitors with financial flavor, have started to unbundle the banks. He has also continued and said that the banks used to do a lot of activities at a single time thus finding themselves competing with small but flexible and fast companies which were amplified concerning flow, resources, business models and technology and are designed towards exact products.
When comparing cryptocurrencies and banking transactions, it is correct to say that bank transactions are slow, costly and inefficient while cryptocurrencies are fast, more secure and decentralized thus enabling instant Peer to Peer transactions.
Casquero goes ahead and says that for cryptocurrencies to work, it’s not necessary for there to be central banks or government which is details already known by the banks. Bank of America and JP Morgan have indeed communicated to their investors and customers that lack of investing in these new technologies and innovations will result in them losing a significant part of the market in the financial world.
Since it is not possible to beat the rise of cryptocurrencies several banks including Santander Group and JP Morgan are already working in collaboration with the blockchain and virtual currencies employing the solution, if you can’t beat them, join them. Other banks like Banco Masventas in Argentina are using Bitcoin when processing international transactions. According to these institutions that have integrated virtual currencies and blockchain tech, it is cost-effective, more secure and faster and users do not need to wait a couple of days for their transactions to be complete and get to other countries.
Banks like the Bank of China are running prototype cryptocurrency making them one of the major central banks to issue digital money while others like Bank of Japan and European Central Bank have joint research from where they conduct studies on the possibilities of using distributed ledgers technology.